Automaker Stellantis’ decision to transfer planned production of its Jeep Compass from Brampton to the U.S. — putting 3,000 Canadian jobs in doubt — is only the tip of the iceberg when it comes to Canadian concerns about the move.
Equally alarming is that the US $13-billion plan announced by Stellantis on Tuesday to increase auto production in America by 50% over the next four years in Illinois — where the Jeeps will be built — Ohio, Michigan and Indiana, de-emphasizes its future production of EV vehicles.
“Unlike previous multibillion-dollar investment pledges,” reported TC TechCrunch transportation editor Kirsten Korosec, “this one doesn’t focus on electrification” with EVs taking a “backseat” in Stellantis’ plan.
In response to anger expressed by Prime Minister Mark Carney, Ontario Premier Doug Ford and Brampton Mayor Patrick Brown — with the feds now threatening to sue Stellantis — the company insists it’s still committed to Canada and is in talks with the government about future plans for the Brampton plant, as well as adding a third shift at its Windsor plant.
Nonetheless, Stellantis’ move calls into question the wisdom of earmarking up to$15 billion in federal and Ontario government subsidiesto Stellantis-LG Energy Solution, announced in 2023, to build an EV battery plant in Windsor, as well as a joint federal-Ontario investment of more than $1 billion announced in 2022 to support the Stellantis plants in Windsor and Brampton.
Automakers, already hard hit by U.S.President Donald Trump’s tariffsdesigned to move Canadian auto production to the U.S., plus slowing EV sales because of consumer concerns about high prices, limited range and the availability of public chargers, are facing a perfect storm of financial issues related to EVs.
GM just announced a $1.6-billion loss in its third-quarter EV earnings because of a shift away from EV subsidies under Trump, as it plans to increase production of gas-powered vehicles at its plants.
Meanwhile, Canada’s federal, Ontario and Quebec governments have earmarked up to $52.5 billion, as of April 2024, to subsidize 13 major EV projects across the country, almost 14% more than the $46.1 billion the auto sector was prepared to invest in itself, according to the parliamentary budget office.
Since then, Honda — earmarked for a total of $5 billion in federal and Ontario government direct and indirect incentives to build four EV and EV battery plants in Alliston and other Ontario locations — has put the projects on hold for at least two years because of the slowdown of EV sales in North America.
GM shutting down Ingersoll assembly plant
GM, earlier this year, announced it was shutting down its assembly plant in Ingersoll which was manufacturing its BrightDrop Zero EV delivery van because of slow sales. with plans to re-open at half capacity in November.
In 2022, the federal and Ontario government invested over $500 million in GM plants in Ingersoll and Oshawa.
In 2023, the federal and Quebec governments announced $300 million for GM and Posco Future M Co., to support an EV battery component plant in Becancour, Quebec.
Also in Quebec, the federal and provincial governments were prepared to invest $8.2 billion toward EV battery production in Saint-Basile-le-Grand and McMasterville, Quebec, by Northvolt Batteries North America in 2023, according to the parliamentary budget office, before the parent company filed for bankruptcy in Sweden in March.
The only good news is that much of the federal and provincial government subsides are linked to production guarantees, so — at least so far — relatively little taxpayer money has been paid out.
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